DARPA Is Bankrolling Research Into Crypto and National Security

America’s Defense Advanced Research Projects Agency, better known as DARPA, has turned to analytics firm Inca Digital to build out a new crypto mapping tool to analyze the impact of cryptocurrencies on U.S. national security. 

The terms of the small business innovation (SBIR) contract will also give the information about the role crypto plays in illicit finance. 

Specifically, Inca Digital’s government contracting division will “provide insight into the use of blockchain-based technologies linked to money laundering, terrorist financing, and sanctions evasions across systems.”

The research effort will also unpack how crypto is moving throughout the ecosystem, key on- and off-ramps, and how crypto may impact traditional finance, among other objectives.

DARPA is a research agency within the U.S. department of defense and works closely with the military to develop new technologies. The agency also played a key role in developing some of the first iterations of the Internet.

Inca Digital’s CEO Adam Zarazinski said in a prepared statement that “digital asset markets hold amazing promise, but also contend with money laundering, market manipulation, and state actors that may pose risks to U.S. national security.”

Once launched, the mapping tool will be available to the U.S. government as well as private firms, joining the ranks of other on-chain sleuthing services from firms like Chainalysis and CipherTrace.

Inca Digital has not yet responded to Decrypt’s request for comment.

Crypto crackdown in the United States

The new research effort comes amid growing regulatory concerns and crackdowns in the world of crypto. 

In August, the U.S. Treasury Department blacklisted the Ethereum mixing service Tornado Cash. 

The department added the project’s website and various Ethereum addresses to its specially designated nationals list. This list is typically reserved for terrorist organizations and international criminals.

Shortly after the blacklisting, an open-source developer who worked on Tornado Cash was arrested in Holland.